Strong TV, ad revenue lift Corus Entertainment shares
Corus Entertainment Inc`s growth in first-quarter revenue at its television and advertising businesses prompted investors to overlook its profit falling below estimates, sending the shares of the Canadian media company up 5 percent.
The company has been heavily investing in developing original TV content to compete with U.S. rivals such as Netflix Inc and Amazon.com Inc`s Prime Video.
Chief Executive Officer Douglas Murphy said in a post-earnings call that its video on-demand platform, offered as an option to online streaming services, also added more audience in the quarter.
"If there is ever a tell that TV has got a strong future, this is it. The vast majority of them (television advertisers) are companies that started digitally and now are moving dollars with television as they`re growing," Murphy said.
Profit at Corus` TV business, which houses brands such as Nelvana and Global Television, rose about 10 percent to C$184.6 million. Advertising revenue for the unit rose 4 percent, the company said.
"The culmination of improved ratings, cyclical advertising strength and the seasonal boost in demand has undoubtedly put Corus on a stronger footing for fiscal 2019," RBC Capital Markets analyst Drew McReynolds said.
Total revenue rose more than 2 percent to C$467.5 million, beating analyst estimates of C$451.24 million, according to IBES data from Refinitiv.
However, Corus` net income attributable to shareholders fell 22 percent to C$60.4 million ($45.81 million), or 28 Canadian cents per share, in the first quarter ended Nov. 30.
Excluding items, Corus earned 33 Canadian cents per share, but missed the analyst average estimate of 40 Canadian cents per share, according to Refintiv data.
Corus shares rose 5 percent to C$5.63 in early trading on the Toronto Stock Exchange.($1 = 1.3185 Canadian dollars)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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